ABSTRACT
Where a company is limited by shares, the capital of the company is divided into shares. These are units of a given amount defining a shareholder’s proportionate interest in the company. The nature of a share was discussed in Borland’s Trustee v Steel Bros & Co Ltd (1901) where Farwell J said:
The main features of a share are as follows:
(a) a right to dividends declared on the shares;
(b) generally (unless it is a non-voting share) a right to vote at general meetings;
(c) on the liquidation of the company or on a reduction of capital the right to receive assets distributed to shareholders of that class;
(d) an obligation to subscribe capital of a given amount which will sometimes be the nominal value of the share if the share is issued at par and sometimes will be in excess of this if the share is issued at a premium (the issue of shares at par and at a premium will be discussed below at para 7.8);
(e) rights of membership attached to the shares as defined in the company’s memorandum and articles (discussed above in relation to the s 14 membership contract at para 6.3);
(f) a right to transfer the share in accordance with the articles of association at para 7.4.
